Cranston Instrumentation sold a depreciable asset for cash of $150,000.The original cost of the asset was $600,000.Cranston recognized a gain of $22,500 on the sale.What was the amount of accumulated depreciation on the asset at the time of its sale?

Question

Quizplus · Accepted Answer

The amount of accumulated depreciation is found by subtracting the gain and the sale price from the original cost: $600,000 - $22,500 - $150,000 = $427,500. However, this calculation was incorrect. The correct calculation should be: Original Cost ($600,000) - Sale Price ($150,000) + Gain ($22,500) = Accumulated Depreciation. Therefore, the correct accumulated depreciation should be $600,000 - $150,000 - $22,500 = $427,500. My initial explanation contained a calculation error. The correct answer, based on the proper calculation, is not listed among the options provided, indicating a mistake in my response.

Cranston Instrumentation Sold a Depreciable Asset for Cash of $150,000